Among homeowners between the ages of 25 and 40, their biggest regrets range from the size of the home to the location:
21% of millennials said the maintenance and other costs are too high
15% said their current home is in a bad location
14% said they bought too big of a house
14% said they bought too small of a house
13% said their mortgage payment is too high each month
13% said they overpaid or paid too much for their home
12% said they didn’t get the best mortgage rate
9% said they don’t think the home was a good investment
5% said they had other reasons for regretting their purchase
Expenses like repairing a roof or fixing appliances or heating and cooling systems seem to be tripping up millennial homebuyers the most, Mark Hamrick, Bankrate.com’s senior economic analyst, said in a blog post.
“It isn’t a question whether such expenses arise, only when and how much they will cost,” he said.
The real estate boom in the US is being driven by a combination of factors – primarily, low interest rates and a pandemic-induced desire for more space and distance from crowded city centers. It’s led to a chaotic market where bidding wars are the norm, prices are soaring, and inventory has hit record lows.
Glen Clemmons, a broker and realtor for Costello Real Estate and Investments in North Carolina, told Insider that some of his buyers have started putting offers in on “coming soon” listings, sight unseen; Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, said she’s putting listings on the market at 8 AM – by 5 PM, she’ll have 20 offers.
That frenzied market is leading hopeful buyers to skip steps they may have normally taken in order to nab a house. The Wall Street Journal’s Candace Taylor reported earlier this year that buyers had started skipping due diligence and waiving inspections, only to discover costly issues down the line like wasp infestations or destructive local woodpeckers.
Scott Trench, the CEO of the real-estate-investing resource BiggerPockets, recently told Insider that the current market should make buyers think twice about trying to purchase a house right now.
“Frantically trying to buy ‘something’ is a great way to make a bad purchase,” he said.
This is the ultra-competitive real estate market in the US right now.
Insider spoke with eight real estate agents from across the country who all described a hectic market where inventory is low and prices are soaring. In many markets, buyers are practically guaranteed to end up in an aggressive bidding war with other hopeful buyers.
Sean Waeiss, a broker and the owner of Wise Property Group in Austin, told Insider that demand is “through the roof.”
“We have 10 to 15 buyers for every seller that we have and … when we’re submitting offers, they’re getting 10, 12, 15, 18 offers on the house,” he said.
So now that a bidding war seems almost inevitable, what can a buyer do to stand out? Below, realtors share their best tips for homebuyers hoping to nab their dream home.
For anyone hoping to win a bidding war without coughing up more money, Waeiss had some hard truths to share: You have to be able to go over list price, and you have to have a lot of cash.
Waeiss said he’s telling clients to be “aggressive” with their price, but that he’s also cautioning them to be mindful of their cash reserves. In Austin, many buyers are waiving appraisal contingencies to make their offers more appealing, which means buyers have to cover the extra money if the house appraises for less than asking price.
“Buyers are having to bring a ton of cash to the table,” Waeiss said. “You’ve got to be able to have a strong down payment and you have to be able to overcome a low appraisal.”
No matter how aggressive a buyer’s offer, however, Waeiss said he won’t get clients involved in “out of control” bidding wars, because the likelihood of winning gets slimmer and slimmer.
“If I were to call that agent and they say, ‘We have 36 offers,’ I would call you back and say, ‘Let’s move on,'” he said.
Pay extra to have the home taken off the market
Sara Olvera, a real estate agent with Dream Town Realty in Chicago, told Insider that she’s found success with offering extra money to get a listing taken down quickly.
“I have a client right now that we were looking at three-bedroom townhomes, and those are hot because in the city, there’s not a lot of single-family homes under a million dollars,” she said. “We got into a bidding war and we paid $30,000 extra than asking price to just take it off.”
Olvera said the seller’s agent wanted to wait several more days in order to see the highest and best offers, but by paying extra to get it taken off the market, the buyer circumvented what could have been a more competitive bidding war.
“Sure enough, they took it off the market and we got it and we’re closing next week,” she said.
Pay attention to presentation
When it comes to actually crafting your offer, presentation matters, said Jared Goodloe, a realtor with Compass in Brooklyn.
Goodloe’s advice was literally to dot your I’s and cross your T’s – make sure words are correctly capitalized, and any scanned documents should look clean and professional.
And don’t, under any circumstances, hand-write your offer.
“If it’s smudgy … you’re not taking me serious,” he said. “Someone that’s wanting to take the time to type up an offer, they’re serious.”
Don’t make your offer contingent on selling your current home
In Raleigh, North Carolina, where Glen Clemmons is based, most sellers aren’t accepting offers that are contingent on the buyer selling their current house.
Clemmons, a broker and realtor for Costello Real Estate and Investments, told Insider that in situations where two offers are essentially apples-to-apples, sellers are almost always opting for the offer that’s not reliant on another sale, since there’s always a risk the buyer’s current home won’t sell.
“So unless you do a home equity line of credit to pull that equity out of your house that you need to sell and put it as a down payment for the next house, then you are not writing a contingent offer,” he said. “It’s not getting accepted.”
Offer to rent back the house
In some situations, giving the seller more time to stay in the home can make an offer more appealing, Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, told Insider.
“I’ve won offers only because my buyers were able to allow the seller to reside in the home for 30 days,” she said.
Of course, that’s easier for buyers who are looking for a second home or weren’t planning to move in right away to allow for renovations, but having some flexibility with the move date – and whether you even want to charge the seller rent to stay a little longer – can make your offer stand out.
“The sellers are selling very quickly, but then they need to find a place to live as well,” she said. “Sometimes, having that flexibility as a buyer where you’ll tell the seller, ‘Hey, I’ll purchase the property, but I’ll give you 60 days where you can stay there, rent-free, until you find your house,’ so that the seller on the opposite end doesn’t feel so rushed.”
Write a personalized letter
Writing a letter to the seller could give buyers a leg-up in a bidding war, said David McDonald, a real estate specialist with DMD Real Estate Group in Seattle.
While there’s no guarantee it’ll make a difference – “Some sellers will be like, ‘I don’t give a hoot about no letter, give me my money!'” McDonald said – you won’t know until you try.
McDonald advised keeping the letter light and brief, and using it as an opportunity to introduce yourself and to let the sellers know who you are, what you do, where you work, and if you have any kids. Some buyers choose to include a photo as well.
“Some people will say [the letter is] completely pointless. That’s a little bit more of a cynical perspective in my opinion,” he said. “No judgment, but that’s not an approach I like to consider, because you just don’t know who you’re working with on the other end.”
So, you’re thinking about buying a house – join the club.
Millions of people across the US have spent the last year in a homebuying frenzy, snatching up available inventory and sending prices through the roof. That demand, driven by a pandemic-fueled desire for more space and a safe haven, isn’t expected to slow down anytime soon.
Still, if you’re hoping to take advantage of historically low interest rates and settle into a home to call your own, it’s not impossible – you may just need to be especially savvy.
Insider spoke with five real estate agents based throughout the US about the homebuying process. They revealed their top tips for buyers, and the guidance they find themselves repeating to clients over and over again.
Sean Waeiss, a broker and the owner of Wise Property Group in Austin, told Insider that it’s important not to have too many preferences set in stone going into the homebuying process.
“Some people are like, ‘Oh, I just want to own a home,’ but they have a lot of parameters: ‘I want to be close in. I want to have a short commute. I want something that’s not dilapidated. I want an extra bathroom,'” Waeiss said. “Well, you’re going to put yourself in a position where you’re not going to end up buying anything.”
Adjust your expectations.
Compass realtor Jared Goodloe, who’s based in Brooklyn, said New York City’s unique real estate market can trip up buyers who are unsure whether they want a co-op unit or a condo, or a new or older property.
“Resell and new development are two different things,” Goodloe said. “So you can’t expect the same amenities, the same upgrades as what you’re going to see with a new development.”
Be prepared for an emotional process.
After a hectic few months in the real estate market, even realtors are starting to feel the emotional toll, Glen Clemmons, a broker and realtor for Costello Real Estate and Investments in North Carolina, told Insider.
“I feel beat up, they feel beat up,” he said. “I had one client who wrote 15 offers before they finally got one, and that’s exhausting.”
Clemmons said his clients are going to multiple showings, putting in several offers, and generally being put through “the emotional roller coaster of, ‘Are we going to get this one?'”
“What I would say is, check your heart when you walk through a house,” he added. “[Going to a showing is] not a guarantee that you’re going to get it. Put your best foot forward, and be patient.”
Be informed, but don’t overdo it.
Goodloe issued the same advice many healthcare professionals likely tell patients: If you have concerns, don’t fall down a Google rabbit hole.
“Google helps you and it aids you and it’s a good cross-reference, but when you hire a dynamic team, I would use my team as the biggest resources – that’s your inspector, your real estate agent, your attorney, your lender. They play a pivotal role in this,” Goodloe said. “I always tell my people, Google, feel free to, but also use me as a resource.”
Choose an open-minded realtor who has experience winning a bidding war.
Given the low inventory and rising prices for homes in the US right now, buyers have a high likelihood of ending up in a bidding war. According to Katie Day, an agent with Coldwell Banker Realty in Houston, working with an experienced agent is a must.
“It’s super important to have someone helping you that understands how to navigate these times and how to navigate the market, and has a track record of winning in multiple-offer situations and negotiating,” Day said.
Sara Olvera, a real estate agent with Dream Town Realty in Chicago, also echoed the importance of the right realtor, and suggested looking for someone who’s willing to get creative when, say, you have a limited budget.
“Sometimes as professionals, we kind of are quick to just be like, ‘Nope, that’s not going to work. You’re not going to do that.’ I’ve had clients come to me and say, like, ‘Hey, [another realtor] said that I couldn’t do that,'” Olvera said. “And I’m like, ‘Well, why not? Let’s play with the numbers.'”
According to Goodloe, the home-buying process is still taking “just a tad-bit longer” due to the pandemic, and he said he urges his clients to be patient.
“I always tell my buyers, focus on something else outside of the transaction,” Goodloe said. “So whether that’s meditating, hanging out with your friends, going on a walk, do something outside of the transaction.”
He did issue one warning though: Don’t spend the time car-shopping, as taking on an auto loan could interfere with a buyer’s preapproval.